Monetary / Fiscal Policy

An example of expansionary fiscal policy would be

• cutting taxes.
• cutting government spending.
• cutting production of consumer goods.
• cutting prices of consumer goods.

How could the Federal Reserve encourage banks to lend out more of their reserves?

• reduce the discount rate
• raise the required amount of reserve
• increase the prime rate
• reduce the money supply

Open market operations are

• the processes by which money enters into circulation. 
• reserves greater than the required amounts
• the buying and selling of government securities to alter the supply of money.
• rates of interest banks charge on short-term loans to their best customers.

The rate the Fed charges banks for a loan

• Prime rate
• Federal fund rate
• Reserve Ratio
• Discount rate

The use of taxes and government spending to affect the economy

• Monetary Policy
• Fiscal Policy
• Contractionary Policy
• Expansionary Policy

A plan to reduce aggregate demand and slow the economy

• Contractionary Fiscal Policy
• Expansionary Fiscal Policy
• Contractionary Monetary Policy
• Expansionary Monetary Policy

The manipulation of the money supply in order to influence the cost and the availability of credit is 

• Banking Policy
• Fiscal Policy
• Monetary Policy
• Spending Policy

If the Federal Reserve raises interest rates to combat rapid inflation, what might be a negative outcome?

• international trade would stop
• taxes will rise 
• The government would put a freeze on prices
• Unemployment rates would rise

Which of the following is a monetary policy action used to combat a recession?

• cutting taxes
• increasing the money supply
• decreasing the money supply
• raising taxes

The Federal Reserve wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT

• decreasing the discount rate.
• increasing the reserve requirement.
• selling securities on the open market.
• making banks hold a reserve for all types of deposits.